FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Required information
[The following information applies to the questions displayed below.]
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2022. In the process
of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2022:
Cost
Date Placed in
Asset
Office furniture
Machinery
Used delivery truck*
Service
$ 320,000
1,730,000
74,000
02/03/2022
07/22/2022
08/17/2022
*Not considered a luxury automobile.
During 2022, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2023 to
increase its production capacity. These are the assets acquired during 2023:
Date Placed in
Asset
Cost
Service
Computers and information system
Luxury auto*
Assembly equipment
Storage building
$ 434,000
88,500
1,370,000
900,000
03/31/2023
05/26/2023
08/15/2023
11/13/2023
*Used 100% for business purposes.
Karane generated taxable income in 2023 of $1,775,000 for purposes of computing the $179 expense limitation. (Use
MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.)
Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers.
Required:
b. Compute the maximum 2023 depreciation deductions, including §179 expense (ignoring bonus depreciation).
Note: Round your final answers to nearest whole dollar.
Description
2022 Assets
Office furniture
Machinery
Used delivery truck
2023 Assets
Computers and Information System
Luxury Auto
Assembly Equipment
Storage Building
Total
Cost
Section 179
Expense
MACRS Basis
Current
MACRS
Depreciation
Total Cost
Recovery
Deduction
$
0
0
0
0
0
0
0
$
$
0 $
0
$
0
$
0
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Transcribed Image Text:! Required information [The following information applies to the questions displayed below.] Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2022. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2022: Cost Date Placed in Asset Office furniture Machinery Used delivery truck* Service $ 320,000 1,730,000 74,000 02/03/2022 07/22/2022 08/17/2022 *Not considered a luxury automobile. During 2022, Karane was very successful (and had no §179 limitations) and decided to acquire more assets in 2023 to increase its production capacity. These are the assets acquired during 2023: Date Placed in Asset Cost Service Computers and information system Luxury auto* Assembly equipment Storage building $ 434,000 88,500 1,370,000 900,000 03/31/2023 05/26/2023 08/15/2023 11/13/2023 *Used 100% for business purposes. Karane generated taxable income in 2023 of $1,775,000 for purposes of computing the $179 expense limitation. (Use MACRS Table 1, Table 2, Table 3, Table 4, Table 5, and Exhibit 10-10.) Note: Leave no answer blank. Enter zero if applicable. Input all the values as positive numbers. Required: b. Compute the maximum 2023 depreciation deductions, including §179 expense (ignoring bonus depreciation). Note: Round your final answers to nearest whole dollar. Description 2022 Assets Office furniture Machinery Used delivery truck 2023 Assets Computers and Information System Luxury Auto Assembly Equipment Storage Building Total Cost Section 179 Expense MACRS Basis Current MACRS Depreciation Total Cost Recovery Deduction $ 0 0 0 0 0 0 0 $ $ 0 $ 0 $ 0 $ 0
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